Tariff Turmoil

During the presidential debate in 1992, two important things happened.

President George H. W. Bush, a Republican, looked dolefully at his watch, as if he was too busy for this nonsense, handing the election to Democrat Bill Clinton. Voters figured if the incumbent was that bored by his job, maybe he shouldn’t get to keep it.

The second thing that happened, arguably more prescient in predicting our future, is that independent Ross Perot, an oilman from Texas, assailed the North American Free Trade Agreement between Canada, the U.S. and Mexico. If enacted, he predicted, Americans would soon hear a “giant sucking sound” as production operations and factories packed up and left the USA, moving their plants and our jobs to Mexico.

Some 30 years later, President Trump is gambling his presidency on a bet that he can suck that manufacturing prowess back into our country. Having already renegotiated NAFTA is his first term, in his second he is starting an international trade barter to restore our American might in making, designing and producing things.

This is an economic policy based not alone on data but on a belief — nurtured by champions of hard work as disparate as Mike Rowe and his Discovery Channel Dirty Jobs, Vice President J.D. Vance and his Hillbilly Elegy account of how the government parched middle of the country dry, and Elon Musk with his phenomenal work ethic — that making things is good for the soul, as well as the bottom line.

The Trump administration warned of turbulance in the rollout of what it called Liberation Day — inevitable after 80 years of the world taking advantage of our generosity. Or, as Trump put it, “They’ve been ripping us off for a long time.” The White House warned us not to look at our financial portfolios until turmoil calmed. They were certainly right about that. The stock market crashed, the globalists threatened retaliation, trade war talk escalated. Also, real human beings lost their jobs.

Then Trump’s gambit — the Art of the Deal — kicked into action.

On Thursday, a friend told me her husband’s business, here in South Florida, would have to fire staff and close facilities. His company imports plastic containers from Vietnam for sale to large food and product corporations in the US.

On Friday, Trump posted on Truth Social that he had a “very productive” phone conversation with To Lam, general secretary of the Vietnamese Communist Party. Last year, the Southeast Asian country, a major manufacturing hub for many Western companies, had a trade surplus with Washington that exceeded $123 billion. Now, they are talking to Trump about the US and Vietnam both removing all tariffs. On this news alone, Nike stocks rallied amid a sea of red on the NYSE.

Other countries are making noises of cooperation — Israel and India came out early for lowering tariffs — even as others, like China and Canada, are retaliating with tariffs of their own. For Trump, this means they have taken his bait. He is playing international chess, at a high level. And in a high-stakes chess match, everything is on the table. That’s why he never talks retaliation. He talks reciprocity.

France, meanwhile, is talking trash. French President Emmanuel Macron called on companies to stop investing in the US. Trump adviser Ric Grenell suggested canceling a $5B American loan for France's TotalEnergies African LNG project.

Gov. Gavin Newsom is not talking trash, he’s talking treason. In a video posted on X, Newsom reached out to overseas countries to ask them to exclude California from their retaliatory tariffs. “California is here and ready to talk. We will not sit idly by during Trump’s tariff war.” Dear Gavin: US Constitution: Article 1, Section 10, Clause 1: ‘No state shall enter into any Treaty, Alliance, or Confederation.’

I don’t mean to suggest there will be no pain. Frankly I don’t know enough about economics even to make that claim. And friends I do trust are worried. One of them, Julio Gonzalez, a tax reform strategist, has suggested privately that the White House drop tariffs on low-cost essentials under $10, to protect American consumers.

But I am reassured by two minds far more conversant in economics than I.

One is Oren Cress, chief economist at American Compass, a conservative think tank. Yes, he did work on Mitt Romney’s campaigns in 2008 and 2012, so perhaps he is vulnerable to not being a charter member of the American First movement. But on Breitbart.com this morning, he said that most of their polling data shows Americans are willing, even eager, to sacrifice short-term for long-term rewards. Listen here.

And then there’s Treasury Secretary Scott Bessent, in my view one of the most brilliant picks of Trump’s second term. Here he is interviewed by Tucker Carlson, recalling the magic of walking into a Trump arena rally last year, seeing a sea of hard-hats and their families. He marveled at the coalition that billionaire Donald Trump and his billionaire ally Elon Trump had formed with these American workers, whose greatest hope seemed to be an economy where their children could thrive.

“President Trump promised American workers that the old standard of living can come back,” he said. In the last 30 years, the Coasts have done great, but the middle of the country has suffered. “Wall Street has done great. It can continue to do well. Now it’s Main Street’s turn.” For reasons of national security, we need to re-industrialize. But for reasons of humanity, we need to give “working Americans real wage gains.” Finally, he asked, if tariffs are so bad, why do these other countries have them?